Tax code blunder.

ankspon

I am on ESA and have received 3 new PAYE coding notices in the last few months,the last one said i owe them £1500 as i receive £12,200 in ESA.I phoned the tax office up and they accepted verbally that nobody receives this amount of ESA and they corrected it over the phone.They said i would receive a new PAYE code but i'm still waiting(3 weeks).Is this long enough to wait and should i also contact the benefits office to make them aware of there mistake with the benefits amount.

Murdina

Are you actually getting enough ESA to be above the personal allowance (maybe you have other income)?

If not and you have no other income then nothing to worry about because you are not liable to pay any tax.

If you have got other income then you do need to be careful. HMRC may issue a code to the benefits office but the benefits office can only operate certain codes (and sometimes don't even do that) so you could end up underpaying tax anyway. If you have say a small pension then ask HMRC to limit the personal allowance on that by how much ESA you estimate you will get in the tax year.

It is well worth contacting benefits office as you might want to find out why and how the error occurred and make sure they do not repeat it.

ankspon

Thanks,yes i have a small occupational pension which takes me just above the tax code and means i pay a small amount of tax, they are aware of this as it says they send the tax code to the company paying the pension.The HMRC said they received the £12,200 ESA payment from the benefits office and issued the tax code from that.I better ring the benefits office to find out why they came to that figure.